Foreward by Andrew Chilvers
When the 5th Anti-Money Laundering Directive was introduced into law by the UK and EU in January 2020, for many professionals it was a much needed addition to legislation that would significantly help business transparency and combat money laundering. In essence, it was good for business and for public and professional confidence.
All jurisdictions signing up to the 5th Directive will build and maintain UBO registries that will be publicly available at any time. UBO registries will also be set up for bank accounts and trusts, although these latter two will not be publicly available but be accessed by the relevant authority such as financial intelligence units and legal advisors looking into money laundering. Investigative journalists who can show a legitimate interest in the case can also have access, which is vital if another Panama Papers (see below) is to be uncovered. Across the UK and EU national UBO registers will be set to connect through a central European platform by April 2021.
Please provide a brief overview of the UBO Register in your jurisdiction and its history?
The European directive was transposed in French law by an order (Ordonnance) n2016-1635 of December 1, 2016, the provisions of which came into force on August 1, 2017 (amended by order no. 2020-115 of February 12, 2020 and decrees (Décret) no. 2020-118 and no. 2020-119 of February 12, 2020, both published in the official publication of February 13, 2020).
The UBO of a company is any natural person who either:
(i) owns, directly or indirectly, more than 25% of the share capital or voting rights of the declaring company or entity;
(ii)exercises over the latter, by any other means, a power of control (determined in fact, by the voting rights he or she holds, over the decisions taken at shareholders’ meetings) or the power to appoint or dismiss the majority of the members of the management, board of directors or supervisory organ.
Where the reporting entity is neither a corporation nor a mutual fund, the beneficial owner is the natural person who satisfies one of the following conditions: hold, directly or indirectly, more than 25% of the capital of the reporting legal entity; have the power, by virtue of a legal act, to become directly or indirectly the owner of more than 25% of the capital; have the power to appoint or dismiss the majority of the members of the management, board of directors or supervisory organ; or exercise, by other means, a power of control over the members of the management, board of directors or supervisory organ.
If no natural person has been identified according to these criteria, the UBO is the natural person or persons who legally represent the company or entity.
The declaration is made via a form called MBE completed and filed by the reporting entity or completed directly online by the reporting entity or by an authorized representative.
How can your firm ensure your clients are fully compliant with the new / existing requirements?
The website https://www.infogreffe.fr/ allows us to see whether a company has duly filed a declaration of beneficial owners.
What changes can we expect to see emerging, are any new proposals expected?
To our knowledge, nothing.